Nigerian Equities May Sustain Upward Momentum, As Investors Bet On Q3 Earnings Inflow, Sept Inflation Report
Market Update for October 13
The buying momentum on the Nigerian Exchange continued as the new trading week opened on positive, extending the bullish transition for the 12th successive session on the strength of buying interests in high cap stocks and blue-chip companies. This is happening in the midst of positive corporate earnings from utility companies like Geregu Power and Transcorp Power that kicked off the 2025 Q3 earnings reporting season on the exchange, even as all eyes are on more earnings reports to hit the market in coming days and weeks.
Reaction to the impressive numbers from Transpower and accumulation in the shares of Dangote Cement among others, pushed the benchmark NGX All-Share index higher to breakout the 147,000 basis points psychological line to a new all-time high of 147,717.20bps on a high traded volume and flat market breadth ahead of macroeconomic data and more Q3 scorecards of listed companies. The NGX All-Share index’s action chart pattern formation indicates a markup phase that signals the possibility of a trend continuation, or pullback which needs confirmation as trading opens on Tuesday.
As such, this is the time for discerning investors and smart traders to reposition their portfolios by way of sector rotation and rebalancing across different classes of stocks ranging from low, mid and high caps in view of earnings power and growth potentials that will support price appreciation and high payout at the end of the day. Here, players should not worry about what the market is going to do, but how they will respond to the emerging market dynamics.
Meanwhile, position taking across the major sectors of the NGX continued ahead of more Q3 earnings reports as revealed by the buying sentiment in real estate, insurance, industrial goods, energy and others with strong prospective of releasing impressive numbers that will influence prices positively. We note that emerging markets stocks across the globe remain undervalued, thereby attracting inflows in the midst of positive macroeconomic data that reveals some recovery and economic growth. The NGX’s intraday volatility continued as its composite All-Share index closed higher on a high traded volume to extend rally.
During Monday’s session, there were more notifications of closed period and board meetings to approve Q3 financials, insiders dealing updates, AGM notices and earnings forecast were received from companies. All eyes are on more numbers this week from NBS September CPI and quoted companies. In equity investing or trading time and timing are very important, because seasonality is one factor that will shape the market in this final quarter of 2025. Despite the mixed sentiment witnessed so far and outlook of the market, the big uptrend remains intact above the T line and the 50-Day Moving Average, despite the ongoing volatility in the market and expectations.
The sustained uptrend at the end of Monday’s trading creates bargain opportunities in the market, but investors should trade some high cap stocks with caution, while repositioning portfolios, targeting consumer goods, industrial, some banking stocks, agrobusiness, and insurance stocks. We would also add to the list, stocks of other services providers with strong fundamentals and earnings power capable of supporting price, and higher dividends payment at the end of the year. These are against the backdrop of new prices and improving macroeconomic indices, and strong corporate earnings. This is however, not forgetting the prevailing mixed outlook for fixed income instruments yields due to rate cuts, declining inflation and relatively stable exchange rate.
To navigate the rest of the quarter and year profitably using fundamental and technical analysis, join investdata’s live sessions at noon every Monday, Wednesday and Friday “and also get investdata technical toolbox and other training materials to play the current state of the market do suggest that discerning investors are gradually becoming greedy, while others are fearful, as seen in the recent trends. Despite the mixed volume pattern witnessed in recent days, it is time to shop for undervalued stocks, sector rotation, go for defensive stocks at the next insider playing opportunity.
Oil price on Monday inched up to continue its oscillation, as it trades at $63.32 per barrel in the midst of US and China trying to de-escalate trade tensions after closing lower the previous week. Even as world leaders makes efforts to restore peace in Gaza and Mideast in the face of OPEC output increase weighing on the market due to oversupply concerns. Weak demand outlook in the face of production increase that may affect crude demand and price. Just as Russia-Ukraine war remains a major concern, as up and down movement in oil price remain also a concern, which has continued to drive volatility across markets.
Meanwhile, Monday’s trading started slightly in the upside and was sustained for the rest of the session, despite oscillating on position taking in highly priced stocks and others, a situation that pushed the Index to an intraday high of 147,717.20bps from its lows of 146,884.31ps, before closing above its opening figure at 147,717.20 bps which was the highest for the session.
Market technicals were positive and strong with higher volume traded, when compared to the previous session, in the midst of flat breadth on a buying pressure as revealed by Investdata’s Sentiments Report showing 100% buy position and 0% sell volume. The total transaction volume index stood at 1.02 points, just as the impetus behind the day’s performance was strong, with Money Flow Index reading 85.87pts, from the previous day’s 79.72pts, indicating that funds entered the market.
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Index and Market Caps
At the end of Monday, the NGXASI gained 729.17bps, closing at 147,717.20bps, from its 146,988.00bps opening level, representing a 0.50% growth. Market capitalization also rose by N464.7bn to N93.76tr, from the previous day’s N93.30.tr, which also represented a 0.50% value gain.
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The upturn was driven by buying interests and demand for high cap stocks such as Transpower, Dangote Cement, NB, Stanbic IBTC, and Custodian, as well as Mansard, Conhall, Transcorp, Accesscorp and SterlingNG, among others. This impacted positively on Year-To-Date gain which inched higher to 43.53%, while Market Capitalization YTD gain stood at N49.6tr, representing a 49.39% rise above its opening level for the year.
Bullish Sector Indices
Sectoral performance indexes were in green, except for the NGX Oil & Gas that closed lower by 0.03%, while NGX Insurance index led the advancers after gaining 2.11%, followed by, Industrial goods, Consumer goods and Banking with 0.66%, 0.23% and 0.16% respectively.
Market breadth was at par as gainers were equal losers in the ratio of 25:25, while activities in volume and value terms were up, after players exchanged 615.91 million shares worth N13.27bn, driven by trades in Conhall, Fidelity Bank, Chams, Universal Insurance and Sovereign Trust Insurance.
Sovereign Trust Insurance and Regency Insurance were the best performing stocks, gaining 9.97% and 9.68% respectively, closing at N3.53 and N1.36 per share respectively, on expectation and market forces. On the flip side, Tripple Gee and Wema Bank lost 9.92% and 4.51%, closing at N5.45 and N19.05per share, purely on the back of profit taking.
Market Outlook
We expect the market to sustain this momentum and sentiment on the back of earnings season in the midst of bargain hunting, sector rotation and portfolio repositioning ahead of more Q3 corporate earnings reports with all eyes are on September consumer price index reports.
However, pullbacks will create ‘buy’ opportunities amidst improving macroeconomic indices, just as more economic reforms will boost growth, a situation expected to support investment and market direction eventually.
We note that discerning investors have continued to target fundamentally sound companies and defensive stocks to protect their portfolios. Any pullback at this point may add more strength to upside potentials. As such, investors should take advantage of price rally to take profit, while also looking at the trends and events across the globe and domestically.
Ambrose Omordion
CRO|Investdata Consulting Ltd
ambrose.o@investdataonline.com
Tel: 08028164085, 08179547605
